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Malaysias healthcare system consists of the private and public sector. The government
heavily funds the public healthcare sector, and patients pay a nominal sum for treatment.
The public expenditure represents 55% of the total healthcare expenditure. The remaining
45% of the total healthcare expenditure is consumed by the private healthcare services
which are paid fully by the patients themselves (out of pocket), their employers, or by
insurance companies. In comparison, Japan healthcare expenditure is paid by
government (37.5%), social health insurance (48.6%) and out of pocket (13.9%).
Malaysian Statistics on Medicine Report indicated that the top 150 prescription medicines
were spent mainly on non-communicable diseases or life-style diseases like diabetes,
cardiovascular diseases, chronic pulmonary disease (COPD), allergies, anti-inflammatory
and anti-rheumatic. The rising healthcare drug expenditure is due to rising population
growth, sedentary lifestyle, increase life expectancy and escalating drug cost.
In January 2013, the government introduced a bill which proposes that pharmacists be
granted an exclusive right to dispense medicines. The bill is yet to be passed and still
waiting for public comment and consultation. With the escalation of healthcare cost, the
government is also proposing an equitable healthcare program for all through the National
Health Financing Scheme, the 1Care Program. If approved, these will change the
landscape of healthcare system in Malaysia which will see doctors playing a decreased
role in the selection of drug. Pharmacists influence will increase, and patients (payers) will
be able to make choices on factors such as price.
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Business Monitor International (BMI) estimated, for 2012, the Malaysia pharmaceutical
market is worth RM 6.06 billion ( 189.4 billion). The market for prescription medicines
alone was valued at RM 4.39 billion (137.2 billion), of which the market shares for the
patented and generic drugs were 56% and 44% respectively. Almost all of Malaysias
pharmaceutical needs for patented and specialized drugs are imported, which is estimated
to account for more than 80% of the local pharmaceutical market (in value terms).
Malaysia pharmaceutical industry produces mainly generic drugs for local consumption
and for export. There are four broad categories of products that are manufactured
prescription medicines (RM 4.39 billion/( 137.2 billion), over the counter medicines (OTC)
(RM 1.67 billion/ 52.2 billion), herbal & health supplements (RM 1.0 billion/ 31.25 billion)
and traditional medicines. The industry manufactures most dosage forms.
According to the Drug Control Authority (DCA) of the Ministry of Health, as of October
2012, there are 259 manufacturing companies licensed by DCA comprising 182 traditional
medicine companies, 75 pharmaceutical companies and 3 veterinary product companies.
MOPI estimated generic drugs prescription account for 70% (in unit terms) of the drugs
consumption in the country, and 44% in value terms due to the cost-effectiveness of the
generic medications. Generic drugs in Malaysia are more cost-effective than the innovator
product equivalent, usually 20-90% less expensive.
Malaysia is the pioneer and global leader in the manufacturing and certification of halal
medicines for export to other Muslim countries. The Chemical Company of Malaysia
(CCM) was the first pharmaceutical firm to be awarded a halal certification, mainly for OTC
products in January 2013.
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The pharmaceutical industry in Malaysia is one of the most open pharmaceutical markets
in ASEAN. This makes Malaysia an attractive destination for foreign direct investment as
a gateway to the ASEAN market (10 countries) of 500 million populations. Under the
ASEAN harmonization for pharmaceuticals, the respective countrys drug regulator is
working towards mutual recognition of GMP certification and drug registrations by 2020.
The National Pharmaceutical Control Bureau (NPCB) of the Ministry of Health Malaysia is
a member of the PIC/s. This means NPCB has the arrangements and competence
necessary to apply an inspection system at an international standard. NPCB scored a first
in the world to introduce electronic online product registration.
The Malaysias membership to PIC/s since 2002 has impacted the pharmaceutical
industry in more ways than one. First, the number of local pharmaceutical manufacturers
has dwindled from slightly more than 100 (prior to PIC/s admission) to 75 today. Second,
there was an approximate 44% decline in the number of Malaysia generics registration for
the 10-year post-PIC/s period. The higher standards of compliance to PIC/s caused delay
in Research & Development (R&D) and the closing down of smaller players.
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The benefits of the higher standard of GMP have encouraged some of the multinational
pharmaceutical companies like Pfizer, GSK, Sanofi and Servier to seek collaboration with
the local pharmaceutical companies for contract manufacturing of their products in
Malaysia for the ASEAN region.
Pharmaceutical Technology
The local pharmaceutical industry invested heavily since Malaysia becoming PIC/s
member to keep up with the stringent GMP standard. The investments were necessary to
upgrade their research & development, investment in the latest technology and
automation.
In the last 5 years, there were a few major investment announcement made. Kotra
Pharma invested RM150 million ( 4.7 billion) in the state-of-the-art manufacturing
facilities, and an addition of RM60 million ( 1.9 billion) for the sterile injectable under the
EPP program. CCM invested RM 135 million ( 4.2 billion) expansions for its
pharmaceutical division.
In 2012, German pharmaceutical giant B.Braun announced its RM1.75 billion ( 54.7
billion) expansion plan in Malaysia to upgrade its research & development facilities,
automation and production technology.
Recently in 2013, Indian drug maker Ranbaxy announced it will invest USD35 million (1.1
billion) into a second new facility to manufacture generic drugs in Malaysia. In addition to
serve the local market, it will also export to the ASEAN markets, Middle East, Europe, Sri
Lanka, China and other countries.
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Refer to Appendix A for some of the cutting edge manufacturing technologies employed in
Malaysia. Photos courtesy from Kotra Pharma, taken from Kotra Pharma Technology
Centre.
The Malaysia Economic Transformation Program (ETP) was launched in 2010 with the
goal to elevate the country to developed-nation status by 2020, targeting Gross National
Income (GNI) per capita of USD 15,000 ( 1.5 million). The current income per capita is
only USD 10,662 ( 1.1 million). The ETPs targets for 2020 will be achieved through the
implementation of 12 National Key Economic Areas (NKEAs), representing economic
sectors which account for significant contributions to Gross National Income (GNI).
The healthcare sector is one of the 12 NKEAs identified by the government. The sector
growth has been robust over the past decade. This sector has one of the highest
multipliers in the economy in Malaysia. Changing demographics, a more affluent society
and more health-conscious lifestyle have let to the creation of a robust domestic industry.
The government aims to further grow this sector by encouraging more private investments,
through 13 Entry Point Projects (EPPs), in areas such as manufacturing of pharmaceutical
products, medical devices, clinical research, aged-care services and supporting
collaborative efforts between public and private healthcare providers. By 2020, the
Healthcare NKEA targets the sector to generate RM35.5 billion ( 1.1 trillion) in GNI and
create 181,000 new jobs.
The Healthcare NKEAs, through EPPs, provide ample opportunities for foreign direct
investment and collaboration with the local healthcare industry. Currently, the
manufacture of pharmaceuticals, biopharmaceuticals, nutraceuticals, microbials and
probiotics are eligible for Pioneer Status or Investments Tax Allowance incentives. The
development, testing and production of pharmaceuticals promoted under biotechnology
are eligible for High Technology Pioneer Status or Investments Tax Allowance incentives.
Refer to Malaysian Investment Development Authority (MIDA) for details
www.mida.gov.my.
Some of the successful EPPs announced were the collaboration between Hovid and
Winthrop (a subsidiary of Sanofi) to develop generic drugs, investment of Kotra Pharma
for sterile injectables, and investment of Biocon (India) at BioXcell, a custom-built
biotechnology park and ecosystem in Iskandar Malaysia.
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The key attractions of the Malaysian pharmaceutical market over the long term are the
governments encouragement of the biotechnology sector, its leading stance in the halal
pharmaceuticals sector and the country economic development. Furthermore, the
elimination of tariffs under the Japan-Malaysia Economic Partnership Agreement and the
consequent Free Trade Agreement (FTA) will serve to further boost trade between the two
countries. BMI rated Malaysia as the 8 th most attractive pharmaceutical market in the 18
countries surveyed in the Asia Pacific region, surpassing other ASEAN countries except
Singapore. Japan was ranked the most attractive in the region, followed by Australia and
South Korea.
Jimmy Piong
He is a pharmacist by training and has been working in the Malaysia pharmaceutical
industry for more than 30 years. He is the current executive council member of Malaysian
Organisation of Pharmaceutical Industry (MOPI). He is the Managing Director for Kotra
Pharma.
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Figure 1: Sterile liquid manufacturing facilities. The Monoblock machine inspects for
vial leakages and foreign particles in the liquid vials.
Figure 2: Water treatment facilities. It uses double reverse osmosis and a triple
automated electrical deionisation system to produce United States Pharmacopeia (USP)
grade purified water. It becomes the source of water for distillation process to produce
Water for Injection (WFI).
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Figure 4: High sheer mix granulator and fluid bed dryer are in a closed system to minimize
contamination to the external environment. Both utilize Clean in Place (CIP) systems
which allow validated cleaning automation. The fluid bed dryer incorporates stainless
steel filter-bag-system in the cleaning automation.
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References:
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